Why is industry leaving our region?
Carriage House is apparently on the brink of a move. We all know that NRG is probably on its last legs regardless of any efforts by anyone locally, and by anyone I'm referring to various local and county officials.
For some odd reason, a lot of people seem to think that union labor is the cause. I know they're a convenient and easy target, but I think there may be a few more important reasons for moves like this.
Let me start with Carriage House and its impending closure and move to Kentucky. Kentucky has offered Carriage House $10 million to move. That's an awful lot of money. What has New York offered to get them to stay? I think we all know the answer to that, don't we?
It doesn't require a business degree from Harvard to assume that any manufacturing plant uses a great deal of electricity. The national average cost per kilowatt hour is 11.05 cents. In New York, it's 17.05 cents. In Kentucky, it's 7.19 cents. Moving to Kentucky will save that company almost 2 and a half times its current electric bill. Without much fear of contradiction, I'm sure that's a significant amount of money.
My understanding from employees at the plant, relative to the missing peanut butter line, the savings there are from transportation costs, as quite simply, Kentucky is a whole lot closer to the product (peanuts) than New York is, and with fuel prices what they are, that's a savings that can only go up. Adding in some toll prices and increases to those tolls, and the added fuel taxes in New York, again, that savings can only increase.
I can't quote exact figures, but I do know just from homeowner friends, the sewer and water rates in the south in general are less than half what they are in New York, and that doesn't include various environmental laws that are specific to New York in regard to waste disposal, all adding to the expense. In the south, businesses are often charged the same rates as private users, certainly not the norm in New York where businesses are generally looked at as cash cows.
Property taxes are another part of the issue for any business in New York, especially our school taxes which have been rising at more than four times the rate of inflation for decades while totally ignoring the reduction in students.
We do have industrial development agencies though, don't we? Unfortunately, they are ineffective, unmonitored, and grant tax breaks for ridiculous ventures like moving medical practices from one town to another, often within the same county, with no net gain in jobs, and certainly not "industrial" in nature. Property taxes out of New York are generally small percentages of what they are here, and in many cases industry is welcomed by decades of zero taxes. But here we are, luring office buildings from locale to locale with our tax breaks. I'd bet the cost of that millennium highway might help if offered as a tax break, but realistically, it sure won't overcome the expense of moving to New York if its built, will it?
Every state has a Workers Compensation Program, but again, New York has one of the most expensive. New York places an 18.8 percent surcharge on the money paid into workers' comp to help pay for its share. The national average is 2.4 percent. Kentucky is at 1.5 percent. Once again, looking at a large business with hundreds of employees, that is a very, very significant amount of money. Any one of the things above is worth moving for a company looking to expand its profits. Adding them together it's amazing any business stays here. And I have to emphasize, we have not discussed wages one bit, not one penny.
If the union was to disappear, and the wages drop accordingly, does anyone think that Carriage House would change its mind? If everything else were equal, would they spend the money to move if the only difference was the union wages? That's doubtful, moving a large industry like that doesn't come cheaply.
Another factor in doing business in New York is the simple process of it all, the forms and regulations to be met, the layers of agencies to be dealt with. Nothing in New York comes easily or cheap for any business. Talk to any small business owner and you'd be shocked to see what hoops they have to jump through, hurdles to overcome just to open the doors of any new enterprise. New York answers every complaint and every issue with a new form or agency, and usually on top of the old ones, not in replacement of them. Those become homes for the thousands of political hacks expecting jobs in return for their help in getting various people elected to offices of every stripe and level.
So, obviously, one would have to add a large amount of inefficiency, even incompetency, into that mix. You wouldn't believe how many jobs have been removed from civil service tests and moved into the realm of political appointments over the years, or management positions overseeing those civil service jobs; so much for skills or educational requirements. I mean, just one example, a billionaire supporter of Gov. Andrew Cuomo is appointed to head the Thruway Authority. He made his money in real estate. His first move is to increase Thruway tolls for trucks by 45 percent. Now, does that seem like an encouragement for business to you, or the decision of someone who has an actual clue or concern of business needs, and his decision's effect on them?
New York can make all the commercials it wants to about how business friendly they're becoming, but in reality much of what ails New York's business climate is virtually irreparable. There are too many people with vested interests in things remaining the same, and far too many people blind to much of what makes New York a poisonous place for any business to operate in. Much of the business here is due to certain specifics that overcome many of the detriments, wineries and such, which quite simply wouldn't allow for a move anywhere else. The joke of Tourism as some sort of panacea is just that, a joke, but one without a punch line, but much easier for politicians to talk about than the real issues gutting entire communities.
New York is not going to fix any of the things I've talked about. New York City and its leaders run the state, most especially Sheldon Silver. New York City is doing quite well, thank you, so why worry about anyplace west of the Hudson River? None of the people here losing their jobs or being taxed out of their homes mean anything to anyone in New York City. New York City is fast becoming a home for millionaires and billionaires, and those they employ, "hundreds-of-thousands-aires" (sometimes made-up words are descriptive) so what do you think they'll do for us? Where is the governor from and most of his supporters? Where is the bulk of New York state political appointees located?
Write all the letters you want to. It's a lot like those letters we all wrote to Santa Claus as children. They just go into the trash.
Paul Christopher is a Dunkirk resident. Send comments to editorial@observertoday.com
